Krezinski v. Hay
77 Wis.2d 569, 253 N.W.2d 522, 1977 Wisc. LEXIS 1321 (1977)
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Rule of Law:
A release of claims for personal injuries, even one that purports to cover all known and unknown injuries, may be set aside on the grounds of mutual mistake if both parties relied on a medical diagnosis that failed to identify a latent, serious injury that existed at the time of settlement but was not contemplated by the parties.
Facts:
- On September 28, 1968, Izetta L. Hay's automobile collided with an automobile driven by Judith A. Krezinski.
- Following the accident, Krezinski was diagnosed with injuries including contusions to the scalp, a cervical sprain, and right dorsal myositis.
- Medical examinations conducted prior to settlement described Krezinski's neurological condition as 'normal' and stated she had 'no significant residual disability.'
- On September 5, 1969, relying on these medical reports, Krezinski accepted $2,300 and signed a release of all claims against Hay and her insurer, including claims for 'all known and unknown personal injuries.'
- Nearly a year later, on August 30, 1970, Krezinski suffered a major convulsive seizure.
- Krezinski was subsequently diagnosed with traumatic epilepsy, a condition she alleged was a latent injury caused by the 1968 accident that was unknown to all parties when the release was signed.
Procedural Posture:
- Judith A. Krezinski filed a personal injury lawsuit against Izetta L. Hay and her insurer, Milwaukee Mutual Insurance Company, in a Wisconsin trial court.
- The defendants asserted as an affirmative defense that Krezinski had previously signed a release of all claims.
- Krezinski replied to the defense, admitting she signed the release but arguing it was voidable due to a mutual mistake of fact.
- The defendants filed a motion for summary judgment, asking the court to dismiss the case based on the signed release.
- The trial court granted the defendants' motion for summary judgment.
- Krezinski, as appellant, appealed the trial court's grant of summary judgment to the Supreme Court of Wisconsin.
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Issue:
May a personal injury release, which purports to cover all known and unknown injuries, be set aside on the grounds of mutual mistake when both parties relied on a medical diagnosis that failed to identify a latent, serious injury that was present but undiscovered at the time of settlement?
Opinions:
Majority - Day, J.
Yes. A general release may be set aside if it was executed based on a mutual mistake of fact regarding a latent injury not contemplated by the parties. Even though a release expressly covers unknown injuries, it is not a bar to an action for such injuries if it can be shown they were not within the contemplation of the parties when the settlement was agreed upon. Here, Krezinski presented evidence that both she and the defendants relied on a medical diagnosis that did not mention the possibility of epilepsy. This reliance on an incomplete diagnosis, which failed to identify a then-existing but unknown condition, raises a triable issue of fact as to whether there was a mutual mistake. Therefore, summary judgment for the defendants was improper, as the question of whether the parties intended the release to cover this specific type of unknown injury is a matter for a jury to decide.
Analysis:
This decision reinforces the legal principle that the literal, all-encompassing language of a release for 'unknown injuries' is not automatically dispositive. The court prioritizes the actual intent and understanding of the parties at the time of the agreement. The ruling establishes that a mistake about a completely different and more severe type of injury (an unknown injury) is distinct from a mistake in prognosis for a known injury. By allowing a release to be challenged based on a latent, undiagnosed condition, the case makes it more difficult for defendants to use releases to summarily dismiss claims for serious injuries that were genuinely unknown and uncontemplated at the time of settlement.
